A Brisbane property adviser has identified Brisbane’s best and worst suburbs for property investments and why he believes buyers should act now to secure an asset.
PK Gupta (pictured above), of Consulting by PK, said there are some excellent investment opportunities in Brisbane, however being strategic about the asset and suburb selection is vital.
“Brisbane definitely has more upside than either Sydney or Melbourne when it comes to investment opportunity,” Gupta said.
“At the beginning of 2021, you could throw a dart at a map of Brisbane while blindfolded and you would have hit a growth location. But things have changed and now it’s not should I buy in Brisbane, but where and what should I buy.”
On Monday, CoreLogic revealed Australian home values fell 8.4% in the eight months to January 2023. The findings from the CoreLogic Daily Home Value Index (HVI) took the national housing downturn into new territory, breaking the previous record in peak-to-trough declines when home values fell -8.38% between October 2017 and June 2019.
Gupta has identified the three best and three worst Brisbane suburbs for investors and why they should be embraced or avoided.
Best investment suburbs
Gupta said Taigum (townhouses), a suburb 13kms north of Brisbane has a mix of accommodation types from established housing to townhouses and units.
“The price difference between townhouses and detached homes has growth substantially,” he said.
“House values have risen considerably in the past 12 months with the median price of approximately $600,000 for a detached dwelling. In comparison, units and townhouses have a median of approximately $400,000, so those who invest in townhouses here will see excellent value growth over the coming year or so.”
Gupta said Northgate (townhouses), a suburb 8km north of the CBD has a range of housing types on offer.
“Gentrification is the big driver here and I’d even say Northgate is Brisbane’s ‘hidden secret’ when it comes to investment,” he said.
“The demographic is shifting solidly away from blue-collar workers and toward upwardly mobile young professionals. The suburb is highly accessible with easy access to the Bruce Highway, the Gateway Motorway, major retail outlets and the airport.”
Clayfield (townhouses) located among Brisbane’s best inner northern suburbs is well regarded, however recent events would soon bring increased demand for housing soon.
“A huge driver here is schooling – specifically Clayfield College as the school has recently moved from being an all-girls institution to co-education. It has an excellent reputation and there’s already been a spike in families moving to the area,” Gupta said.
“On top of this it’s a very accessible suburb with heaps of retail outlets and lifestyle options on offer.”
Worst investment suburbs
Gupta said Toowong (units), might seem to be a controversial choice as one of the “worst investment suburbs”, but he specifically focuses on investor units.
“Toowong is an inner-city western suburb with great facilities and infrastructure and the nearby University of Queensland is also a huge source of tenants. Despite this, attached housing is oversupplied and unit prices have only gone up 2.2% in the past 12 months, while house prices rose 24.4% during the same period.”
Gupta said Burbank/Chandler (houses) – two suburbs located 13km south-east of the CBD – are dominated by low-density and acreage housing.
“This is the sort of housing that appealed to buyers during the pandemic and that’s been reflected in strong capital growth of more than 50% over the past three years, however, it’s not an area that will see ongoing demand at this level post-pandemic,” he said.
“The slowdown is already underway as rental yields are low at just 2% and days on market have risen from 50 days to 100 days in just a few months.”
Gupta said the problem for Woodridge (all property types) is that it is dominated by tenants.
“Around 65% to 70% of all households are renting,” he said.
“This is fine when a rental boom is underway, but if measures are taken to ease the housing crisis, Woodridge will suffer greatly. As vacancies rise in the future, landlords will be competing against each other to attract tenants and there will be a lot of property on the market.”
North Brisbane Home Loans mortgage broker Luke Ashby said in his opinion, property values had decreased in Brisbane for several reasons.
“Firstly, incredibly fast interest rate increases, which means people aren’t able to borrow what they could 12 to 18 months ago, so therefore the maximum that people can afford to pay has dropped significantly,” Ashby said.
“Inflation being so high and people having less extra cash (that they saved during COVID-19) or borrowing capacity to afford the inflated property prices that come from the ‘COVID boom’.”
Gupta has identified the three best and three worst Brisbane suburbs for investors and why they should be embraced or avoided.
